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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (87969)10/26/2007 3:19:11 PM
From: GST  Read Replies (1) | Respond to of 110194
 
If I own something and I use it as an asset to leverage so I can buy stuff "cheap", and if that asset price declines, then the cost of buying that "cheap" stuff goes up. Those who think that falling housing prices in the US are "deflationary" are blind to the reality. A falling house price is the same as a falling dollar -- you are holding something that is becoming worthless. To think that you will be able to use your worthless asset to get other people to give you stuff cheaper than before is just plain dumb. Name me a banana republic that experienced deflation and I will consider this a debate with two strong sides -- till then, the people talking deflation are playing with half a deck.



To: John Vosilla who wrote (87969)10/26/2007 3:20:26 PM
From: THE ANT  Read Replies (1) | Respond to of 110194
 
I think talk of hyperinflation is silly.We need inflation now to bail out the debtors and reduce our debts to the world.If we get 30% inflation in a short period of time,houses would no longer be under water.At that point priorities would change and inflation would go down.Japan choose deflation as it was in a position to do so and it was in their interest(given that real estate was bubbled and must return to the long term trend vs income)


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